Business model innovation in India

Abstract

Purpose

The study aims to provide insights into the changing nature and dynamics of business model innovation in India over the last decade.

Design/methodology/approach

This study uses a unique hand‐collected data set of 95 observations that mentioned business model innovation in India in the financial press between 2001 and 2008. The study analyses business model innovation trends across industries, firm types and newness of innovation.

Findings

First, with time the percentage share of business model innovations by new entrants has been increasing. Second, new entrants increasingly attempt efficiency improvements while targeting novel ways of meeting customer needs, whilst incumbents predominantly adopt efficiency‐based business models. Third, over the period of the authors' study, there was a clear shift in business model innovation away from IT‐related industries towards consumer goods, media and financial services. Fourth, new entrants introduced new‐to‐industry, whereas incumbents introduced new‐to‐firm innovations. Fifth, novelty‐centred business models of new entrants and incumbents were predominantly new‐to‐firm; but efficiency‐centred business models of new entrants and incumbents were new‐to‐firm and new‐to‐industry, respectively. Sixth, over time, novelty‐centred business model designs adopted by firms changed from being new‐to‐industry to new‐to‐firm type, whilst efficiency‐centred business model designs remained relatively unchanged.

Originality/value

Business model innovation is increasingly becoming a priority for firms globally in order to create competitive advantage, but little is known about the nature and dynamics of such type of innovation in India. The study analyses how business model innovation in India has evolved between 2001 and 2008. The study draws policy implications to stimulate and sustain business model innovation in India.

Citation

Velu, C. and Khanna, M. (2013), "Business model innovation in India", Journal of Indian Business Research, Vol. 5 No. 3, pp. 156-170. https://doi.org/10.1108/JIBR-08-2012-0068